Camp Reassessing Top 25% Income Tax-Rate Plan (Transcript)

Jan 4, 2013

House Ways and Means Committee
Chairman Dave Camp said in an interview on Bloomberg
Television’s “Political Capital With Al Hunt,” airing this
weekend, that he is reassessing a top 25 percent rate he has
proposed as part of a plan to revamp the U.S. income-tax code
even as he says he’s “absolute” in opposing any further tax
increases.

(This is not a legal transcript. Bloomberg LP cannot
guarantee its accuracy.)

AL HUNT: We begin the show with Republican Congressman Dave
Camp of Michigan, the chairman of the House Ways and Means
Committee.

Before we start, I want to say the best news of all. Two
weeks ago, you were diagnosed as cancer-free. You’ve been
battling it last year, and you were diagnosed. Congratulations.
What a wonderful holiday gift.

DAVE CAMP: Thanks a lot. Christmas came early to our house,
so I’m very grateful, had a lot of support and prayers and
encouragement, and that works.

HUNT: Well, that’s great, Mr. Chairman. Let me take you to
the fiscal cliff and the debt ceiling. You’re out of the fiscal
cliff frying pan, and you’re into that debt ceiling and
sequester fire. You’re essential to all this. Specifically how
much should the debt ceiling be increased, for how long, and at
what price?

CAMP: I think it’s important that we got the permanent tax
policy, because that lets us pivot to comprehensive tax reform,
which is so important for growth and jobs.

HUNT: But the debt ceiling comes up in two months.

CAMP: It does.

HUNT: So what - do you - do you increase it? There are
business leaders who say, don’t fight over the debt ceiling.
Fight over other things, just increase it.

CAMP: Well, absolutely we’re going to not default. That’s
just not even part of the issue. But what we need to do is to
increase the debt ceiling, also have the sort of spending reform
and controls that we need to see, because as I said, it’s out of
control. We’ve now done the revenue piece. We now need to move
forward with a willing partner to - and there are some common
areas we can look at.

For example, look at the Simpson-Bowles commission to start
with. The president has also adopted many of these proposals. So
let’s move forward on that together.

HUNT: So if you increase the debt ceiling by, say, $1
trillion, $1.5 trillion, do you have to cut spending by $1.5
trillion?

CAMP: I think we’re going to look at significant reforms in
spending. We know it’s out of control.

HUNT: But you’re not necessarily tied to dollar for dollar?

CAMP: I don’t think that’s necessarily been established.
But what we really need is a partner with Democrats who are
willing to now step forward and say, these are the things we
need to do. We’re spending more than we bring in. We can’t
continue to do that over the long haul. And it is hurting the
ability of the economy to grow. It’s suppressing economic growth
by about 1 percent, and that’s a million jobs. And obviously,
seeing the jobs report today, we need some help on that.

HUNT: You mentioned that - by the way, speaking of that
jobs report, 155,000, not great, but not bad.

CAMP: Well, unemployment went up. It’s better than
negative. It’s anemic. And we really need to jump-start the
economy. The debt and deficit and spending is suppressing the
ability of the economy to grow.

HUNT: I do want to ask you this about the spending cuts. A
trillion, trillion-and-a-half, where? I haven’t heard
Republicans tell me where that is going to come from.

CAMP: Well, we need to start with some of the areas where
there’s been some common ground. One is either Simpson-Bowles
commission. The other is what occurred in the talks that have
happened before. Super-committee talked a lot about areas where
we could look at. That has gone out. And, frankly, if you read
Bob Woodward’s book, there’s a lot of common areas that we’ve
talked about over a number of years -

CAMP: Those are some common areas. Well, I think those
would start. And we need to begin to have a dialogue with the
Democrats, and the president needs to lead his own party on
this, which he has to date not done.

HUNT: Will Republicans lay out their specific goals for
specific programs that they want to cut -

CAMP: Well, we have. And we’ve done it in super-committee.
We’ve done it in Simpson-Bowles discussions. Many Republicans
have - I didn’t, but -

HUNT: You voted against Simpson-Bowles.

CAMP: I didn’t, but many Republicans on that commission
did. But my issue was not necessarily specific spending cuts. It
was the entire amount of revenue that they wanted to take out of
the economy I didn’t agree with.

HUNT: Now, the president says, yeah, let’s have spending
cuts, let’s do it, but let’s also put together a bigger package
and have more revenues, too.

CAMP: Well, we’ve established permanent tax policy. We’ve
established the permanent level of revenue the government’s
going to get. And we’re not going to go back there again.

HUNT: So you’re not open to even any consideration -even
though John Boehner offered $800 billion, and even as much as $1
trillion, and you got $600 billion. So you’re not open to any
conversation about that?

CAMP: No. We now need to pivot to the spending side. We’ve
established -

HUNT: One hundred percent spending?

CAMP: - permanent tax policy, and we’ve established how
much on a permanent basis what the government’s going to get out
of the economy, and we’re not going to go for anymore.

HUNT: So no - no -

CAMP: No. That’s an absolute, in my book.

HUNT: OK, let’s go to tax reform. You have talked about
lowering rates to 25 percent, corporate and individual. You now
have a top rate of 39.6 percent. That would be almost a 40
percent tax cut for the wealthiest Americans. Is that still what
you’re going to push?

CAMP: Well, obviously, this was all established in our
budget before we’ve had this latest deal, so we’re going to have
to go back and look. But I think the idea is - which was
established in Simpson-Bowles - a structure of, how low can we
get rates if we can broaden the base by closing some of these
special interest loopholes? Look, we need a healthier economy.
We need to see more jobs being created. And our code is too
complicated. It’s 10 times the size of the Bible with none of
the good news.

HUNT: But can’t get to 25 percent now, can you? I mean, you
may - you may be able to lower it and broaden the base, but 25
percent isn’t realistic.

CAMP: We’re going to still try to get there. And I think
it’s important that we have a lower corporate rate, as well as a
lower individual rate, and there won’t be as many deductions and
loopholes. And, obviously, some of the provisions that came over
in this deal that came back from the Senate, obviously, I don’t
support. And so we’re going to have to look at all of those and
find a way to simplify the code, make it flatter and fairer and
more understandable.

HUNT: Thirty percent rate, realistic?

CAMP: Look, I’m going to try to get that rate as low as I
can. And if we can get the political consensus to move forward
on that, I think there’s some really good policy we can do
there.

HUNT: But you won’t tell me what rates you think you can
get to.

CAMP: Well, I have to re-evaluate it with the new baseline.
But it is important that we got - I guess what’s really critical
in this discussion is that we now got a permanent baseline. We
don’t have any more temporary tax policy.

HUNT: Well, let me ask you this. Would you do away with the
exemption for state and local taxes?

CAMP: That’s going to be one of the key areas we look at.

HUNT: But what - how do you feel about that?

CAMP: Well, I think we’re going to have to have that on the
list of one of the things we look at. That is a very key one -

HUNT: But you can look at everything, but what I want to
know is, what are things you’re going to - and you don’t have
to, you know, specify how much, but are you going to curtail
that? Will you curtail that example?

CAMP: That’s clearly one of the areas we’re going to have
to have. If we’re going to lower rates significantly, we’re
going to have to have that issue looked at.

HUNT: And how about the home mortgage deduction? Does that
have to be curtailed?

CAMP: Well, we’re going to have to look at that, as well.
And, look, I - first of all, I have a home mortgage. It is most
Americans’ largest savings vehicle, so we’re going to have to do
that in a very careful way. Are there ways that we might be able
to do that with broad consensus and support? But I don’t look at
eliminating that in any way. I think we’re going to have to see,
should that be available at the very highest levels? And I think
that’s something, obviously, that occurred in this last tax
policy. We’re going to need to phase out some of those issues,
and that’s one we’ll be looking at.

HUNT: Mr. Chairman, you’re a young fellow. So I was around
for the ’86 act. It was painful. It was painful. And they got
rates lowered. You know how they did it? You know how they did
it. I know. They raised corporate taxes. They created - they
treated capital gains as ordinary income, raised capital. Now,
you’re not going to do any of that, are you?

CAMP: We’re going to try to do this in a revenue-neutral
way with the new baseline, both in the corporate and individual
side -

HUNT: And you’re committed to that -

CAMP: And I’m committed to that. And my corporate plan has
been out there now for over a year.

HUNT: Right.

CAMP: So I believe that this is really important both for
the business side and the individual side, because so many
businesses file as individuals, and we want to try to have those
rates be as close together as possible, and that’s why the 25
rate for both was in our budget last year.

HUNT: The president said it ought to pick up revenue, you
ought to do tax reform that gains revenue.

CAMP: Look, the government is taking enough revenue out of
the economy now. And what we really need to do is find a way to
have the economy grow in a more robust way. And to do that is
simplifying, lowering rates, particularly for businesses and
individuals, because we’re the highest corporate rate in the
world. We cannot sustain that and expect money which is - can go
all over the world and has many options to come here in the
United States and invest. We want those investments here in the
U.S. so that we can grow the jobs here.

HUNT: Finally, let me just circle back. On the debt
ceiling, as I understand what you’re saying, we will not
default, but - but it’s only going to be approved if there are
some sort of spending cuts.

CAMP: We need spending cuts. We need -

HUNT: But is that essential to approve the debt ceiling?

CAMP: Yes. And we need further reforms in entitlements. And
the president needs to step up and help lead his party in that
direction.

HUNT: Dave Camp, the powerful and cancer-free chairman of
the House Ways and Means Committee.

CAMP: Thank you very much.

HUNT: Thank you so much for being with us today.

CAMP: Thanks, Al.

***END OF TRANSCRIPT***

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